To calculate Myntra RTO and return settlement, start with the order-level payout you received, then apply reversals: the sale value for returns, any commission or fee credit your agreement allows, and charges such as reverse logistics. RTO orders usually never settle a sale, so check only for fees charged. Match each line against your seller agreement, rate card and settlement report, and confirm the latest terms.
RTO versus customer return: why settlement treats them differently
RTO (return to origin) happens when a shipment is not delivered and the courier brings it back to you. A customer return happens after the customer has received the product and sent it back through the return process.
The distinction matters because the money position is different. On an RTO, the sale was usually never completed, so there may be nothing to reverse, only fees to examine. On a customer return, a sale may already have been credited to you, so the settlement needs a reversal and then a view on which fees come back to you and which stay.
Exact timing depends on your payout cycle and agreement with Myntra. Treat anything below as a framework, and confirm the specifics in your seller agreement and current rate card.
The building blocks of a settlement line
Whatever the order status, a settlement line is built from the same components. Identify each one in your settlement report before you calculate anything.
- Sale value: the amount settled for the order after any discounts or funding adjustments.
- Commission: as per the rate card or agreed terms for your category.
- Fixed or other fees: any per-order or collection-type charges in your terms.
- Forward logistics or shipping fee: charged for delivery, if applicable to your model.
- Reverse logistics fee: charged on returns, if applicable.
- GST on fees and tax deducted at source: rates and treatment should be confirmed with your tax adviser and the marketplace invoices.
- Adjustments, penalties and recoveries: manual or rule-based entries that sit outside the standard flow.
The working formula for one order is: net settlement = sale value - commission - fees - taxes and deductions +/- adjustments. For a return, you calculate the same formula for the reversal entry and add it to the original payout.
How to calculate the impact of an RTO
- Pull the order from your Myntra settlement or order report and confirm its status is RTO, not a customer return.
- Check whether any sale value was credited. If the order never settled, the expected sale impact is nil.
- List every fee charged against the order: shipping, RTO-specific or handling charges, and any tax on them.
- Compare each fee to your seller agreement and rate card. A fee that is not in your terms is a query to raise.
- Check inventory: the unit should be back in your stock or in a pending return-to-seller status, so the physical count matches the financial one.
The RTO cost per order is therefore fees charged + tax on those fees, plus the cost of any unit that comes back unsaleable.
How to calculate the impact of a customer return
- Find the original sale line and note what was settled to you: sale value, commission and fees.
- Find the return or reversal line. Note the sale value reversed.
- Check whether commission and other fees are credited back, partly credited or retained. This depends on your agreement, so verify it rather than assume.
- Add the reverse logistics fee and tax on it, if your terms provide for one.
- Net it off: return impact = sale value reversed - commission credited back - any fees credited back + reverse fees + tax on those fees.
- Check the returned unit: received, received in good condition, or missing or damaged.
That last step is where recovery cases come from. If the unit returned is wrong, damaged or never arrives, the reversal may be correct but you still have a loss to claim.
Common reasons your calculation will not match
- Timing: the sale and its reversal land in different payout cycles, so a single month looks off.
- Partial reversals: only part of a fee is credited back, or a bundled order is returned partly.
- Fee not reversed: commission stays charged on an order that was returned.
- Wrong status: an order shows as a customer return when it was an RTO, or the reverse, which changes the applicable fees.
- Rate mismatch: the fee applied differs from the rate card for that category or period.
- Unit never received: the financial reversal is processed but stock is not back with you.
A monthly reconciliation routine
- Export the settlement report and order report for the same period.
- Tag each order as delivered, RTO or customer return.
- Recalculate expected net settlement for a sample, then for all orders, using your agreed terms.
- Flag lines where actual differs from expected, and group them by cause.
- Match returned units against your warehouse receipts.
- Raise cases for fee errors, missing units and unexplained deductions, with order IDs and evidence, and track them to closure.
Doing this in spreadsheets works at low volume. As order counts grow, MarketplaceMetrics by Fundle can reconcile sales and settlements, check commissions and fees against your agreed terms, and track returns and recovery cases. Myntra Excel reports are reviewed today, and other marketplaces are in scope discussion.
Worked example
Illustrative example only. The figures and rates below are assumptions for explaining the method, not Myntra rates. Replace them with your own agreement terms. GST on fees is ignored for simplicity.
- Selling price per order: ₹1,000
- Assumed commission: 20% (₹200)
- Assumed forward shipping fee: ₹60
- Assumed reverse shipping fee: ₹80
- Assumed RTO fee: ₹60
- Assumed terms: commission credited back on returns, forward fee retained
Order A, delivered and kept: 1,000 - 200 - 60 = ₹740.
Order B, customer return: original payout ₹740. Reversal = -1,000 + 200 (commission credited back) - 80 (reverse fee) = -₹880. Net = 740 - 880 = -₹140, which is the forward and reverse fees you bear.
Order C, RTO: no sale settled. Only the RTO fee applies: -₹60.
Total for the three orders: 740 - 140 - 60 = ₹540. If your report shows a different figure, compare each fee with your terms to find the gap.
Questions and answers
Is an RTO order settled the same way as a customer return?
No. An RTO usually involves an undelivered shipment, so there may be no sale to reverse, only fees to verify. A customer return follows a delivery, so it needs a sale reversal and a check on which fees are credited back. Confirm both in your agreement.
Where do I find the fee rules for returns and RTO?
Start with your Myntra seller agreement and the current rate card for your category. Then compare them with the fee columns in your settlement report. If the two differ, or the terms changed mid-period, raise it with your account contact and keep the evidence.
Why is commission still deducted on a returned order?
It may be correct under your terms, or it may be an error. Some agreements retain certain fees on returns and credit others. Check the agreement and rate card, then compare the original and reversal lines for that order ID before raising a query.
Can I reconcile Myntra returns without software?
Yes, at low volumes. Use order and settlement exports, tag each order as delivered, RTO or return, recalculate expected payouts and list differences. It becomes slow as volumes grow, when a tool such as MarketplaceMetrics can automate matching and case tracking.